These Chinese ‘geologists’ could also very likely be understating the true significance and size of the deposits. The state-run oil companies do the bidding of the CCP. Today’s CCP is still rooted in ancient Chinese history and follows the philosophy of Sun Tzu, therefore appearing weak when strong, and applying this method to any given situation. The territory dispute is another story. However, in hindsight, the Chinese wouldn’t be trying so hard to acquire this field given the fact that the deposit size will only contribute a fraction of the gas output they need.
BEIJING: Chinese state-run oil companies hope to develop seven new gas fields in the East China Sea, possibly siphoning gas from the seabed beneath waters claimed by Japan, a move that could further inflame tensions with Tokyo over the disputed area.
Beijing had slowed exploration in the energy-rich East China Sea, one of Asia’s biggest security risks due to competing territorial claims, but is now rapidly expanding its hunt for gas, a cheaper and cleaner energy to coal and oil imports.
State-run Chinese oil and gas firm CNOOC Ltd will soon submit for state approval a plan to develop Huangyan phase II and Pingbei, totalling seven new fields, two industry officials with direct knowledge of the projects told Reuters.
The approval would bring the total number of fields in what is called the Huangyan project to nine.
If approved, the seven new gas fields would not see a big jump in China’s total gas output, supplying only a fraction of last year’s 106 billion cubic metres (bcm) and dwarfed by operations in the disputed South China Sea and Bohai Bay off north China. Chinese geologists said gas deposits in the East China Sea region were much smaller and more scattered.
The greater issue is the political risk if Beijing approves the new gas fields. Tensions over the East China Sea have escalated this year, with Beijing and Tokyo scrambling fighter jets and ordering patrol ships to shadow each other, raising the fear that a miscalculation could lead to a broader clash.
“It’s a sign of impatience on the side of the Chinese, stemming from a lack of movement on the Japanese side on the gas fields issue,” said Koichi Nakano, associate professor of political science at Sophia University in Tokyo.
China and Japan in 2008 agreed to jointly develop hydrocarbons in the area, but Tokyo wishes to settle the issue of maritime boundaries before developing the gas fields.
“The question is what will be Japan’s response and whether they would be able to talk China out of a unilateral move,” said Nakano. “But escalation of tensions leading to a war? I don’t think so. The Americans will be watching this situation with grave concern and may play a role of a mediator here.”
MAJOR EAST CHINA SEA EXPANSION
China and Japan disagree on where the maritime boundary between them lies in the East China Sea. Beijing says its activities are in the Chinese territories, while Tokyo is worried the Chinese drilling near the disputed median line would tap into geological structures in its waters.
If approved, the new gas fields would supply China’s manufacturing hub of Zhejiang province, about 400 km (249 miles) away on the east coast, with production slated to start in the fourth quarter of 2015, said the officials.
CHINA FAST-TRACKING HUNT FOR GAS
China, the world’s top energy user, is on a fast track to boost the use of natural gas, with demand for gas forecast to grow more than four fold by 2030 from the 147 bcm last year. China is the world’s fourth biggest gas consumer.
China first started pumping gas in early 2006 from the Chunxiao field, part of the massive Xihu trough, but territorial disputes have hindered an industry keen to explore and develop the region, Chinese industry experts said.
“China has made compromise, having slowed down the works quite a few years,” said a state oil official, “The cards are in the hands of Chinese, as companies are capable of developing (this area) after all the explorations done over the years.”
China’s plan to expand East China Sea operations comes after a near six-year lull in investment in the area, since the 2008 agreement to jointly develop hydrocarbons in the area.
Full article: China in $5 bn drive to develop disputed East China Sea gas (The Economic Times)